What is practice financing for veterinarians?
Simply put, practice financing means funding granted by a financial institution to veterinarians to start a new practice or expand to new locations. As a veterinarian, it’s often easy to overlook that operating your own practice means you’re also a small business owner. This means that to keep caring for your patients, you would also have to ensure that your overall operations are running as smoothly and as hassle-free as possible.
Like most businesses, you need the necessary startup funds to establish your practice. These funds can come from your personal savings, conventional banks, the Small Business Administration (SBA), or online lenders.
 Is it difficult to get a veterinary business loan?
If you’ve been operating for a while now and planning to open a new location, chances are it’s going to be easier for you to acquire funding. Financial institutions are more open to lending funds to established businesses that have a track record of earning money. On the other hand, fresh graduates looking to open a new practice should know that your current credit standing will be the basis of your overall creditworthiness. Other factors such as student loans and other types of debt may also come into play and affect your ability to be approved for a veterinary business loan.
If you aren’t in a hurry to start your very own clinic, consider joining an established practice first to hone your medical skills and learn the ropes of running a successful veterinary clinic. After gaining more experience in the industry, you can then choose to apply for a veterinary business loan to acquire an existing practice or start from scratch.
What Are Veterinary Business Loans They Used For?
Veterinary business loans are there to assist veterinarians with their funding needs. These loans enable veterinarians to start a new practice, open a new location, or acquire an existing clinic. Whatever the case may be, it is important to understand that your loan terms may vary based on how you plan to spend the money you will borrow. Aside from the ones mentioned above, here are some of the other uses of veterinary practice loans:
- Improving your veterinary clinic’s operations
- Buying/upgrading medical equipment
- Purchasing kennels for overnight patients
- Hiring new staff
- Marketing and promotions
What are the Veterinary Business Loans available to you?
Let’s take a look at some of the loans that you should consider when applying for veterinary business loans.
SBA 7(a) loans for veterinarians
According to the SBA’s official website, SBA 7(a) veterinary business loans can provide terms of up to 25 years for commercial real estate, up to 10 years for equipment financing, and up to 7-year terms for financing working capital. Loans offered by the SBA can reach amounts of up to $5 million and are provided by SBA-approved credit unions, banks, and online lenders. Generally, this type of loan can be used for:
- Buying new veterinary equipment
- Pay employee salaries
- Market the business
- Renovating a veterinary practice
- Refinancing a veterinary practice
Business loans for veterinarians
Loans are probably one of the most popular financing options out there. Bank loans may offer low-interest rates, high loan amounts, and flexible payment terms to borrowers with great credit and a decent amount of liquid assets. However, for startup business owners, keep in mind that veterinary business loans may be difficult to obtain. The good news is that some banks offer loans that are specifically geared towards veterinarians looking to open their own medical practice. Before applying for a conventional bank loan, be sure to explore all of your financing options as there may be loans out there that may be perfect for you and your current financial situation.
Business line of credit for veterinarians
Another option for practice loans for veterinarians is a business line of credit. A business line of credit is a flexible loan from a financial institution that veterinarians can access, repay, and then access again as needed. Veterinarians applying for a line of credit could use the funds to cover emergencies, upgrade medical equipment, and even explore other types of business opportunities. The way a business line of credit works is similar to a credit card in terms of having a fixed credit line and a predetermined repayment schedule. However, business lines of credit are best used for bigger purchases because of higher credit limits.
Business credit cards
The great thing about having a business credit card is that veterinarians can use them to cover day-to-day business expenses while also racking up points and rewards. Many business credit cards also offer interest-free financing which is perfect for businesses that want to pay for purchases over time without paying for added interest.
Online loans for veterinarians
Online loans are another great way to finance your veterinary start-up or your practice’s daily expenses. Online loans usually have a faster application process compared to traditional banks and credit unions. Online lenders usually take borrowers through a pre-qualification process that would determine the different interest rates and terms they qualify for depending on their creditworthiness. Borrowers can then pick and choose the loan terms that would best fit their needs. Online lenders offer competitive rates and a convenient way to access loans - making it a great option for veterinarians that need funding as soon as possible.
 Can I get Veterinary Business Loans if I have bad credit?
If you have bad credit, it might be more difficult for you to acquire loans from conventional financial institutions. The best course of action to take is to learn more about other lending options that would not only get your credit score back on track but also address your funding challenges.
How much does it cost to finance a veterinary practice?
In an article by Veterinary Practice News, it was found that the cost of starting a stationary small animal clinic (with equipment included) was approximately $1,000,000. Meanwhile, the cost of starting a mobile clinic was found to be more affordable at $250,000.
Pros & Cons for Veterinary Business Loans
Before applying for a loan, it’s important to weigh certain benefits and drawbacks. It only makes sense to think of this carefully as the future of your career and your financial standing depends on this one big decision.
Veterinary business loan benefits
- Interest paid is often tax-deductible
- Having great credit means qualifying for lower interest rates
- Flexible payment methods
- Access to money that you can use for a variety of business purposes
Veterinary business loan drawbacks
- Some types of loans may require collateral
- Late payments may incur additional fees
- Defaulting on a loan may hurt your business and personal credit scores
- Traditional lending institutions such as national, regional, and local banks may ask for a plethora of documents to gauge your financial standing
*Note that the pros and cons of veterinary practice loans depend on your prospective lender and the type of loan you are trying to acquire.
Some of the Best Practice Financing for Veterinarians
Financial institutions are now recognizing the value of medical practices and are now providing customized loans for veterinarians and other medical professionals. Let’s talk about two of the most popular lenders that offer business loans that specifically cater to veterinary practices.
OnDeck
OnDeck is an online small business lender that pioneered the use of data analytics and digital technology to accurately assess the creditworthiness of a small business. Currently, OnDeck offers short-term business loans and business lines of credit for veterinarians that are looking to manage cash flow, purchase equipment, or expand their practice.
Live Oak Bank
Live Oak Bank offers loan solutions for veterinarians that are looking to acquire an existing practice, construct from scratch, or expand to multiple locations. What sets Live Oak Bank apart from other lenders is that it was primarily founded as a veterinary lender. Now, they have also added loan solutions for agriculture, pharmacy, and healthcare as part of their list of services. They also provide veterinarians with free informational resources ranging from helpful customer testimonials to financing advice to make your practice more cost-effective and efficient.
Wrapping up: Are there other options for veterinary practice financing?
While it’s standard that lenders evaluate your creditworthiness as a prospective borrower, it’s also equally important for borrowers to carefully assess their prospective lenders. As a borrower, one of the best things you could do is to compare various types of veterinary business loans and determine which one fits your current financial situation. If you need a one-stop-shop for all of your veterinary business loan needs, try PrimeRates.
PrimeRates provides prospective borrowers with personalized loan offers through a simple pre-qualification process. Here’s how it works:
- Pre-qualification application takes less than 2 minutes to complete and would not have an impact on your credit score
- After getting pre-qualified, choose the offer the best fits your needs by comparing monthly payments, APRs, and loan amounts
- Finalize your loan offer with your chosen lender - your lender may ask for additional documents such as ID, income, and other relevant financial documents
- Once approved, all you have to do is wait for your funds!
